Car Affordability and Buying Rules Quiz

What percentage of new vehicle buyers are now signing up for four-figure car payments?

• 10%

• 15%

• 20%

• 25%

According to the 35% rule, if you earn $80,000 annually, what is the maximum amount you should spend on a car?

• $20,000

• $28,000

• $35,000

• $40,000

What is the suggested down payment percentage according to the 20/4/10 rule?

• 10%

• 20%

• 25%

• 15%

Why is it recommended to not finance a car for more than four years?

• To keep monthly payments low

• To ensure the car is paid off before it depreciates too much

• To minimize interest payments

• To avoid high insurance costs

What is the maximum percentage of your gross monthly income that should be spent on car payments, including insurance and maintenance?

• 15%

• 20%

• 10%

• 5%

Which of the following is a benefit of leasing a car?

• No need for a down payment

• Ownership after lease term

• Lower monthly payments

• Unlimited mileage

What is a potential downside of leasing a car?

• Immediate ownership

• Higher monthly payments

• No warranty coverage

• Mileage limits

Why might financing a car make more sense than paying all in cash?

• To avoid interest payments

• To increase car value

• To keep cash available for investments

• To reduce insurance costs

What is a recommended strategy for saving money on car insurance?

• Stick with one insurance provider

• Increase your deductible

• Avoid comprehensive coverage

• Call around for different rates

Why is buying a used car, especially one that is three years old, often recommended?

• They are easier to finance

• They have better fuel efficiency

• Most depreciation has already occurred

• They come with a longer warranty